it is a shortened version on "what are you going on about?" or "what are you talking about?"

usually used when someone is not making sense for extended periods of time or if you feel like you've missed something.

can be lengthened to show complete and utter confusion.
eg.
what the fuck are you on about?
what, exactly, are you on about?
what the fuck are you on about, exactly?
what the fucking hell are you on about you fucking cock? how's about you learn to fucking speak english?

example 1.
knobhead: dude. i totally just pwned that n00b. i asdfghjkl; the ask;nfw. fo shizzle my nizzle dizzle.
awesome: what the fuck are you on about?

example 2.
knobhead: so, tomorrow, then?
awesome person: what?
knobhead: we can go and you can meet them, yeah?
awesome person: what are you on about?